Netflix shares dip, recover, dip on net neutrality rules

Netflix felt a sting on Wall Street Wednesday following Verizon's legal win in a net neutrality case that lets the carrier charge added fees for online content delivered at a faster rate. It was victory for Verizon, but tough news for Netflix and other Internet companies that may see higher costs going forward.

The online video subscription company's shares dipped 4.5 percent to $322.60 at 9 a.m. yesterday on the West Coast but recovered to end the day at $330.38. The stock was trading down 1.7 percent at $325.29 early Thursday morning.

The stock initially fell following a federal appeals court ruling that overturned a Federal Communications Commission regulation that barred Internet service providers from treating certain Web sites differently from others.

Wedbush Securities estimates that Netflix could face new expenses topping hundreds of millions of dollars each year if the company wants to guarantee users quick delivery of movies and shows such as "House of Cards." A Wells Fargo & Co. analyst expects it will probably take at least one year for the net neutrality ruling to take effect.

The Los Gatos-based company, which currently charges $7.99 a month, could end up paying broadband providers as much as $4.80 for higher-definition content requiring more bandwidth, according to Bloomberg.